I used to think that if there was reincarnation, I wanted to come back as the President or the Pope or as a 400 basball hitter. But now I would like to come back as the bond market. You can intimidate everybody.
It's important to remember how fortunate we are as a country to have a currency and a bond market that is seen in every way as a source of strength and it's a huge responsibility for us to keep it that way.
Never try to time the bond market. Anyone who claims to know the future of interest rates is certifiable.
Increasingly, the real estate developers can't get bank loans for their project financing in China. They're now going into the Hong Kong market to raise money in the bond market at very, very high rates, as high as 15, 20 percent.
The fact that the bond market is rallying today is a plus. If this ends up being a bear market, it will be one of the first ever that began when interest rates are down.
Markets need not be in sync with one another. Simultaneously, the bond market can be priced for sustained tough times, the equity market for a strong recovery, and gold for high inflation. Such an apparent disconnect is indefinitely sustainable.
Since 2008 you've had the largest bond market rally in history, as the Federal Reserve flooded the economy with quantitative easing to drive down interest rates. Driving down the interest rates creates a boom in the stock market, and also the real estate market. The resulting capital gains not treated as income.
People are putting their money into treasuries because they worry that the risk of putting their money into the bond market, the stock market or even the money markets is very high.
When I say the economy is shrinking, it's the economy of the 99%, the people who have to work for a living and depend on earning money for what they can spend. The 1% makes its money basically by lending out their money to the 99%, on charging interest and speculating. So the stock market's doubled, the bond market's gone way up, and the 1% are earning more money than ever before, but the 99% are not. They're having to pay the 1%.
The bond market is debating with itself what the intent of the Fed is. I don't think the Fed has a multi-step process. They are taking it step by step.
The lion's share of the bear market is over, ... It's a two-part issue. Yes, the marketplace could be nasty. But there's a great deal of nastiness that's already happened in the bond market.
The most serious problems lie in the financial sphere, where the economy's debt overhead has grown more rapidly than the 'real' economy's ability to carry this debt. [...] The essence of the global financial bubble is that savings are diverted to inflate the stock market, bond market and real estate prices rather than to build new factories and employ more labor.
I think if you go beyond a year - if this continues into the system in the out years, I think there is a risk and that - that we could have a negative reaction in the bond market and that will offset the good that was attempted to be done.
The ECB's interventions in sovereign bond markets should not be perceived or interpreted as a 'freebie' for governments. They are temporary.
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